Median Salary ?

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In a company , median salary is where half the number of employees are getting more and the other half are getting less than that salary number

Till a few years ago , all limited companies had to get the annual salary of their top management ( directors ) , approved by the Department of Company Affairs . And while approving , DCA applied some internal ” guidelines ” ( – who should earn how much, and no more  ! )

Companies learned to guess , as to what figure would pass the muster  !

I believe , nowadays , this is left for the shareholders to decide

A few years earlier , companies were required to publish in their Annual Reports , a section called ” Employees Details ”

In this section , they were required to publish full details ( Name / Birth Date Edu.  Qualification / Date of joining / Current Exp / Past Exp / current salary etc ) of all the employees drawing more than Rs 3000/- per month

In a few years time , in case of a few large companies , this section ran into hundreds of pages , as salaries kept rising

So the limit got progressively raised to Rs 6000/- pm and later to Rs 12,000/- pm , until one day this requirement got dropped

No doubt , this section was most sought-after by Headhunters / Bridegroom seekers , and avidly researched by all employees across the companies to find out where they stood in comparison with their colleagues  !

Then , in 1978 , came Bhoothlingam Committee report

It recommended ( which got accepted by DCA ) that the compensation differential between the lowest and the highest salary in a company should not exceed 10 times  !

But that committee never laid down any ” Upper Limit ” for the salaries of the lowest paid workers – which kept rising , month after month , since the DA ( Dearness Allowance ) was linked to Consumer Price Index  , which kept galloping !

On the other hand , Companies were not able to raise the annual salaries of their directors , because of ceiling imposed by DCA  !

As a result , this differential ( of no more than 10 times ) , kept shrinking  !

I remember having projected the annual growth rate of the salary of the lowest paid worker in L&T ( where I worked ) , to estimate that it would overtake the Chairman’s salary , within a few years  !

Now contrast this with what Business Line ( 06 July , 2015 ) reported as follows

:

———————————————————————————–

Name of Top Honcho  …….. Ratio { Own Salary / Median Employee Salary }

————————————————————————————

*  Y C Deveshwar……………………………  439

*  Mukesh Ambani…………………………..  205

*  Aditya Puri…………………………………  117

*  Vishal Sikka………………………………..  116

*  Chanda Kochar……………………………..   97

*  Azim Premji…………………………………   89

*  Sikha Sharma………………………………    74

*  Deepak Parekh……………………………..    19

————————————————————————————————————————————————————————-

I hope this ” market determined ” and ” democratically arrived at ” managerial remuneration will continue without outside intervention

What companies want to pay their lowest paid workers and their highest paid top honchos , should be left to their shareholders

But when it comes to the salaries of High Court / Supreme Court Judges or Government Secretaries , is it not a travesty of justice that , after 25 years of service ,  they get paid , less than the starting salary of some 24 + fresh graduate MBAs ?

In a company called , ” India Inc. ” , we , the citizens are the shareholders

It is high time we start rewarding our ” Top Honchos ” , commensurate with their responsibilities  !

———————————————————————————

hemen  parekh

08  July  2015

http://www.B2BmessageBlaster.com

http://www.hemenparekh.in

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